Navigating the New DOJ Data Restrictions: Is Nearshore Tech Talent the Answer?
The U.S. Department of Justice’s (DOJ) new rule, “Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons,” is set to significantly impact how companies handle cross-border data transactions. Taking effect on April 8, 2025, this regulation places restrictions and prohibitions on transferring U.S. personal data and government-related data to countries of concern, including China, Cuba, Iran, North Korea, Russia, and Venezuela.
Understanding the Core Issues
At its core, the rule aims to prevent access to sensitive U.S. data by foreign entities that could pose a national security risk. It impacts “covered data transactions” – those involving access by a country of concern to government-related data or bulk U.S. sensitive personal data. This includes data brokerage, vendor agreements, employment agreements, and investment agreements. Sensitive personal data encompasses covered personal identifiers, precise geolocation data, biometric identifiers, human ‘omic data, personal health data, and personal financial data.
The rule imposes various compliance obligations, including annual audits and reporting requirements. These obligations require companies to develop robust compliance programs to ensure adherence to the new regulations. For more information on these requirements, refer to Hogan Lovells’ insights.
Roles Potentially Affected by DOJ Restrictions
The new DOJ rule affects a wide range of roles critical to data handling and management. Here are some of the key positions impacted:
DevOps Engineers:
Impact: DevOps engineers are responsible for ensuring the smooth operation of systems that handle data. With increased restrictions, their role in maintaining compliance and data security becomes more critical.
Data Scientists:
Impact: Data scientists work with various datasets, some of which may be classified as sensitive under the new regulations. Ensuring that data analysis processes comply with these rules is essential.
Cloud Engineers:
Impact: Cloud engineers manage cloud infrastructure, which often involves handling sensitive data. Ensuring compliance with the new regulations will be crucial, especially if cloud services are used to store or process data that falls under the restricted categories.
Cybersecurity Specialists:
Impact: Cybersecurity specialists are responsible for protecting data from unauthorized access. With increased restrictions on data sharing, their role becomes even more critical in ensuring that data is secure and compliant with new regulations.
IT Project Managers:
Impact: IT project managers oversee projects involving data handling and transfer. They must ensure that all projects comply with the new DOJ regulations, which could involve re-evaluating partnerships and data storage practices.
Data Analysts:
Impact: Data analysts work with various types of data, some of which may be classified as sensitive under the new regulations. Ensuring that data analysis processes comply with these rules is essential.
AI/ML Engineers:
Impact: AI and ML engineers often work with large datasets, some of which might be restricted under the new rule. They must ensure that their work complies with data protection regulations.
Is Nearshore Tech Talent a Viable Alternative?
With increased restrictions on data transactions involving countries like China, businesses are exploring alternative talent pools to maintain operational efficiency and innovation. Latin America (LatAm) emerges as a compelling nearshore option, offering skilled tech professionals with cultural affinity and convenient time zones for U.S.-based companies.
Cost Savings: LatAm vs. China
One of the significant advantages of nearshoring to LatAm is the potential for cost savings compared to hiring in countries like China, especially when considering the increased compliance costs associated with the new regulations. While specific salaries vary based on experience and company size, here’s a general comparison:
| Role | China (USD/year) | Argentina (USD/year) | Colombia (USD/year) |
|---|---|---|---|
| DevOps Engineer | $60,000 – $120,000 | $25,000 – $60,000 | $20,000 – $50,000 |
| Data Scientist | $50,000 – $150,000 | $20,000 – $70,000 | $18,000 – $60,000 |
| Cloud Engineer | $50,000 – $120,000 | $20,000 – $60,000 | $18,000 – $55,000 |
| Cybersecurity Specialist | $60,000 – $150,000 | $25,000 – $70,000 | $22,000 – $65,000 |
| IT Project Manager | $40,000 – $100,000 | $18,000 – $50,000 | $15,000 – $45,000 |
| Data Analyst | $30,000 – $80,000 | $15,000 – $40,000 | $12,000 – $35,000 |
| AI/ML Engineer | $70,000 – $180,000 | $30,000 – $90,000 | $25,000 – $80,000 |
Key Considerations Before Making the Switch
While nearshoring to LatAm offers significant advantages, companies should consider the following:
Data Security: Ensure that any partners or employees adhere to stringent data security protocols and comply with U.S. data privacy regulations.
Infrastructure: Evaluate the reliability of internet connectivity and IT infrastructure in the specific region.
Cultural Nuances: Invest in training to bridge any cultural gaps and promote effective cross-cultural communication.
The DOJ has established a national security program to regulate foreign access to U.S. sensitive personal data and government-related data. For more information on this program, see the DOJ’s National Security Division or Clifford Chance’s analysis.
Conclusion
The DOJ’s new data restrictions present both challenges and opportunities. By proactively exploring alternative talent pools like those in LatAm, companies can mitigate risks, maintain access to skilled professionals, and potentially reduce costs. As the April 8th deadline approaches, businesses should carefully assess their data handling practices and develop a comprehensive compliance strategy that includes evaluating nearshore tech talent as a viable and strategic solution.